The holidays are upon us, often seen as make-or-break it time for brick-and-mortar retailers as shoppers stream into their stores by the millions. But according to National Retail Federation’s recent survey of Black Friday weekend 2012 shoppers, online purchases accounted for more than 40 percent of the average person’s spend. Clearly, the convenience of e-commerce continues to pull more time-crunched consumers away from the malls and other physical destinations. That’s a trend that’s unlikely to change.

But as anyone who has a pair of ill-fitting, online-purchased pants hanging in the back of the closet knows, there are still unique advantages to shopping in a real store. Customers can try on and check out the merchandise. They can ask questions and get help from a live person. Rather than sitting in their sweats in front of the computer, they can get out and have a little fun, especially when retailers provide an experience that makes being there worth the trip. (Note to stores: this requires more than hiring a pianist to play classical music near the escalator.)

Maximizing profits in physical environments depends on an ability to capitalize on the singular strengths of the in-store shopping experience. To do this, retailers must get smarter about how they cater to the consumers that do come through their doors, and this is where brick and mortar purveyors can learn a lot from their online brethren. . .

Analyze

Understanding what makes in-store visitors happy and inclined to spend demands real-time analysis of their behavior‹analysis that’s just as sophisticated as what’s currently done online. But when it comes to making sense of consumer behavior, e-commerce companies have the advantage of a digital trail. Using clickstream analysis and other data mining techniques that track online activity, online retailers can learn a lot: How much time did visitors spend on my site? What pages did they look at? Which deals did they respond to? Which products did they buy and which did they decide against? Gathering this kind of granular info from in-store environments is trickier. After all, nobody clicks on a point-of-sale display and it’s sometimes hard to tell whether a shopper has left a store empty-handed because she couldn’t find the right size or the check out line was too long.

Technology that helps retailers capture information about in-store traffic and customer behavior can go a long way toward closing the insight gap that exists between online and brick and mortar channels. Imagine being able to use real-time behavioral intelligence to better manage check out wait times, deploy service staff more efficiently or understand the effectiveness of displays and promotions. Think of it as clickstream for brick and mortar.

Act

Turning insight into action is the next step. Online retailers leverage analytics to do things like make targeted recommendations to consumers based on their purchasing history, or by offering real-time discounts on items that complement those that are already in a cart. Once brick-and-mortar retailers know more about how customers are behaving in-store, they too can adjust their strategies to maximize profits and provide more high-touch service. The data might even point to an action that, on its face, seems counterintuitive. Register wait times are a good example. If they are too long, customers might dump their items and leave.

But can wait times be too short? Does this indicate you have an opportunity to reallocate resources to other high value tasks? How would you staff your registers based on this information? Or maybe sales depend less on your checkout process and more on floor activity … in which case, better training and more helpful service staff could make a big difference and even counteract the effect of showrooming, the trend where customers check out the merchandise in a store and then buy from a competing online vendor. The key is to figure out what conditions lead to more sales and take action to make those conditions happen.

Adapt

In a world where consumer desires are fickle, and competition is fierce, success ultimately comes down to an ability to adapt, and adapt quickly. Just a couple of days ago, I heard a news story on the radio about online retailers that are now providing free shipping on returns. Why? They realized they were losing sales with consumers who weren¹t sure about an item and didn’t want to get stuck with return shipping charges. They adapted. Doing things the way they’ve always been done is no longer going to cut it for brick and mortar stores. Whether it’s offering something as simple as free alterations, deploying new technology like hand held devices that allow customers to complete transactions anywhere in the store, better in-store analytics, or opening the doors on Thanksgiving Day, being on top of what customers want, when they want it and then doing something about it is essential.

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